Global Energy Horizons Corporation v The Winros Partnership
[2024] EWHC 441 (SCCO)
Rhett St James v Wilkin Chapman LLP
4 July 2024
[2024] EWHC 1716 (KB)
High Court
A client sued their lawyers over unpaid bills after winning a personal injury case. The court decided the lawyers' contract with the client (including a seemingly informal letter) limited their right to recover costs not paid by the other side in the case. The court also found the lawyers should have told the client about going significantly over budget, and they couldn't get the extra money from the client. Essentially, the lawyers had to stick to what was in the agreement they made with the client, despite standard legal clauses saying otherwise.
Key Facts
- •Rhett St. James (Claimant) appealed three decisions by Costs Judge Rowley regarding a solicitor-client assessment involving Wilkin Chapman LLP (Defendant).
- •The dispute centered on WCL's entitlement to unrecovered base costs from St. James after settling a personal injury claim for £65,000.
- •The case involved a Conditional Fee Agreement (CFA) and a Client Care Letter (CCL).
- •Key issues included whether the CCL formed part of the contract, the interpretation of 'all base costs' in the CCL, and the application of CPR 46.9(3)(c) regarding unusual costs.
- •WCL incurred costs significantly exceeding the approved budget, and the Claimant was not informed of this overspend.
Legal Principles
Contractual interpretation: considering the whole contractual package, including the factual matrix and contextual considerations.
Wood v Capita Insurance Services Ltd [2017] UKSC 24, Malone v Birmingham Community NHS Trust [2018] EWCA Civ 1376, Jones v Wrexham Borough Council [2008] 1 WLR 1590, Gavin Edmonson Solicitors Ltd v Haven Insurance Company Limited [2018] UKSC 21
Contra proferentem rule: interpreting ambiguous contract terms against the party who drafted them.
Not explicitly cited, but implied.
Consumer Rights Act 2015 s.69: construing ambiguous terms in consumer contracts most favorably to the consumer.
Consumer Rights Act 2015 s.69
CPR 46.9(3)(c): costs are presumed unreasonably incurred if unusual in nature or amount and the client wasn't informed.
CPR 46.9(3)(c)
Solicitor's duty to inform clients about costs: requires keeping clients informed about likely overall costs and costs incurred.
Code of Conduct r.8.9
Case management discretion: courts have broad discretion in managing cases, including amendment of documents.
CPR 46PD 6.15
Outcomes
The Claimant's appeal was allowed.
The CCL formed part of the agreement, creating a CFA-Lite arrangement where the solicitor's unrecovered base costs were not recoverable from the client, except in specific circumstances (small claims or client breach of obligations). The court found that the Costs Judge erred in his interpretation of the retainer. The court further found that the Costs Judge erred in not properly applying CPR 46.9(3)(c) presumption of unreasonableness given the significant budget overspend.
The Defendant's cross-appeal was dismissed as academic.
The cross-appeal concerned a case management decision to allow an amendment to the Points of Dispute. This was rendered academic by the decision in the main appeal.